Thursday, 15 October 2015

Innovation in business
is very important, but most important is developing a product/service consumers
are willing to buy. Over the years, many products with innovative features have
failed, not because they are not good, in fact, most times, they bring more to
the market than existing products. Unfortunately, consumers end up avoiding
them leading to over 70-90% of innovation failures and eventual withdrawal of
such product from the market. Examples like Microsoft Windows Vista, Apple’s
Newton PDA, the Concorde supersonic airplane etc reminds us that not everything
innovative finds a market. Some of them actually came into the market when
consumers were not ready for such innovation.

Entrepreneurs with new
products or services want customers to adopt it and get maximum satisfaction
from using them. However, entrepreneurs often face the challenge of convincing
customers to move from an existing product where they derive satisfaction, to a
new one which its utility is not certain.

Here are some reasons customers may resist your new offerings.

1.Your products bring too much change

Change
is good, but customers don’t always appreciate it when a product is bringing
too much change to their lifestyle. For instance, Coca Cola’s attempt to change
the original taste of coke was met with resistance. When consumers feel very
comfortable with an existing product, they can go to any length to resist any
attempt to change it especially when such a change will affect other areas of
their lives. This resistance comes as a result of consumers being satisfied
with their current situation, and see no reason to change. Habits that have
been developed while using a particular product are difficult to do away with.
Any product that requires a change in behaviour will likely experience
resistance.

2.Innovations with the wrong
technology

Many
businesses apply the wrong technology in their market. In Nigeria, when it
comes to telecoms, GSM is the way to go. Over 90% of subscribers use it, and it
is the preferred network in the world. For companies that came into Nigeria
with CDMA technology - Starcomms, Multi-links etc, it wasn’t a favourable
market for them. Technology has seasons and regions where they are most
appreciated. E-retailers in Nigeria observed that insisting on shoppers buying
and paying online alone may not give them the desired result; they decided to
introduce ‘Pay-on-delivery.’ This act is building confidence in people to use
the technology. The right technology must be one that fits into a people’s
lifestyle, values and norms. Every technology introduced into a business must
be compatible with the desires of the consumers.

3.Innovations that are too complex

Keep
it simple. Innovation is all about simplifying life. Innovative products are
those that are useful to consumers, and are easy to use. Years back, the long
process of registering on a website puts off many people, but today, with your
social media accounts, it looks seamless. Consumers are always reluctant to go
for innovative products that are complex to use, complicated and confusing. If
you can’t keep it simple, it’s not good enough.

Consumers’ resistance
of a product doesn’t mean a failure, but it points out the need for
entrepreneurs to pay more attention to the needs of the market. Bringing a
technology that consumers are not familiar with, and the risk level cannot
easily be ascertained will create an air of doubt in the consumers. If the resistance
is allowed to prolong, it leads to rejection and eventual product failure.

Tuesday, 13 October 2015

Ayomide Oke is a software
developer I met in 2013 on my way to Kano state. While we were waiting for the
flight to take off, I watched him play around with an application on his device;
it was fascinating especially when I discovered it was a financial package. We
got talking, and he explained that he was on his way to Abuja to make some
presentations to some financial institutions about this package. The package
was modelled after M-Pesa, Kenya’s successful e-payment system. He displayed
all the features and functions of the application, and how Nigeria’s economy
will be better off with the package. I was confident any financial institution
will jump at it since Nigeria was talking about a cashless society.

Unfortunately, Ayomide’s
story was different. He explained how
difficult it has been for him to sell the product to clients, even though it
was a great product. I was thinking aloud why would any client not want such software
that will empower the unbanked in rural areas in Nigeria and make the
organisation profitable in the long run? So with my background in Marketing, I
started probing further into why such a good product got rejected by clients. One of the questions I asked him was, “After
your presentations, what responses do you normally get?” I was expecting to
hear all the negatives that can make a product fail, but he said, “I usually
get good commendations about the software, but they still can’t commit to
buying the package.” If a package is good, and meets the need of the client,
why is it being resisted?

Many entrepreneurs like
Ayomide have experienced customers’ resistance towards their innovative ideas
or products. It’s frustrating because you know your product is good, even the
customers can attest to it, yet the product struggles to find a place in the
market. This time, the quality of the product or service is not in question, it
can compete with existing offerings in the market, but patronage is still not
as expected. This time, the problem has gone beyond bad product or poor
marketing, other factors have come to play. Even the big corporations
experience this too, for instance, as good as the benefits of the electric car are
or the proposed self driving car, I have seen people developing cold feet
towards these innovations. “They are good, and I like them but they are not my
type of cars” are some of the comments I’ve heard. If all that consumers crave
for is quality product that will bring high satisfaction, why are they
reluctant to adopt same innovations that made it possible?

Understanding why
consumers resist innovative products can help entrepreneurs in handling objection
as well as making an effective presentation. Unfortunately, most businesses
focus mainly on how to get consumers to adopt their products without paying
much attention to some reasons why they may resist such products. This is has
been the cause of failure for many leading innovative products.

Some of these reasons
and how they can be dealt with will be discussed next.

Thursday, 10 September 2015

In my last article, we
discussed how business ideas can be converted into new products. Today, we will
look at how small businesses can effectively market their new innovative products.
This became necessary following an encounter I had with a vendor who came to
present an electronic ‘Invitation Card’ that is tied to invitees’ social media
platform. After the presentation to the panel, I asked a simple question, “What
am I going to do with the card after the event?”

The product was innovative
and great, but if we are paying so much for it, we should receive something
greater than what the vendor was offering. Unfortunately, the panel didn’t get
a convincing response in terms of values he wanted them to pay for. Offering a
new product at the right value and price can be very challenging especially
when technology is involved, but you can get consumers to consider your
product, if you:

1.Tie your innovation to an ‘important
value’

Each
feature in a product is valued from very important to not so important. If
consumers must pay certain amount for a product, that amount must commensurate
with the value they are getting. Consumers will not pay you because you
introduced technology into your product. The technology is good, but the most
important benefit consumers will get from your product should be your main
concern. Don’t push benefits you cannot easily point out its worth to
consumers.

2.Show why your innovation is better

This
vendor showed us how his product is different, but failed to point out why it
is better than what we were already used to. Differentiating your idea is
great, but if consumers cannot figure out what makes it better than existing
ideas, you will have problem convincing them to buy. Don’t show us how your innovation
is different; show us why it is better.

3.Make the price ridiculously irresistible

Every
new innovation is meant to give more value at a lower price all things being
equal. There is a reason every mother would prefer to use diapers than use
cloth napkins for their babies even though diapers are more expensive.
Innovative ideas must be priced such that the total benefits derived surpass
the amount the consumer wants to pay. Don’t give consumers a price tag that
will force them to have a rethink about your product.

4.Present your product features
logically

Selling
is like learning. When selling, you are trying to teach your customers about
your product. You take it step by step, ensuring that they understand every
step before you make the next move. Good information help consumers make purchase
decisions about a product. The more information you give them about your product,
the earlier they reach a decision. Don’t be in a hurry to present your product
features, consumers need time to process information provided.

Embedding technology
into products/ideas is the commonest means to innovation, however there is no
guarantee consumers will buy into it. The first lesson I learnt in Marketing is
that a ‘Product is a bundle of benefits’ and consumers are paying for these
benefits, not the product. As an entrepreneur, always think in terms of
benefits consumers will derive from your products when using it, not the
technology that you have embedded into it. Don’t sell technology, sell
benefits.

Tuesday, 8 September 2015

Businesses are always
in constant search for new ideas that will sustain them in the market, and
deciding on a particular idea is usually very challenging for entrepreneurs. As
an entrepreneur, various things can slow down the rate at which you convert
your ideas to eventual new product.

For every successful new
product development, dozens of promising ideas have been considered by an
organisation. The essence of the consideration is to determine which of the
ideas is good enough to be introduced into the market at the right time. Timing
is key in business decisions, and every idea must be considered along this
line. Businesses prefer a business idea that can move into the market faster
before that of the competitors.

However, there are
delays entrepreneurs will likely encounter before they make that decision to
create a new product.

Too
many disjointed ideas:

It
is good to have a pool of ideas on the table before making a decision, but the
more ideas you have for consideration, the slower you will be at picking one.
When you have a large number of promising ideas that you are considering at a
time, it becomes more difficult to pay attention to any particular one. Each
business idea is a process with its own chain of activities, so it is important
to consider early which of the ideas is more promising/important, at what cost,
and what experience do I have to execute it? The fewer the promising ideas you
have, the better your chances of converting one into a finished product.

Capacity
of resources:

Every
business idea requires resources to make it achievable. Resources help bring
ideas to fruition however; when these resources are shared among various
promising ideas, it weakens the speed at which you come up with new products.
You must understand the capacity of your resources to sustain an idea or group
of ideas per time. Taking all ideas with your limited resources will only lead
to a crash even before you develop any product

Lack
of Experience:

When
exploring ideas, it’s important we focus on ideas around our areas of
competence. It’s easier to develop ideas around website/App design if you have
knowledge in programming than if you don’t have at all. We have alot of
aspiring entrepreneurs who go into an industry where they don’t have the needed
experience and capacity to breed ideas that can lead to new products hence;
they remain stuck in existing products. If you want to convert ideas into new
products, begin by considering ideas in your field of experience.

When selecting business
ideas, focus on the ones with technical and commercial values, and that has the
capacity to keep you motivated into a new product development. New product
development is all about speed – getting into the market faster. No business wants
to introduce an obsolete product into the market; they make effort on
minimizing delays from ideas to new products.